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- USD49.220.00%
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- INTEREST37.00%-1.00
- BITCOIN82,900-0.92%
- October 12, 202619°
Global Companies Shift Operations from Singapore to Malaysia
Some companies are relocating parts of their operations from Singapore to Malaysia due to lower costs, tax incentives, and access to larger markets. Moves by H&M and Heineken indicate this trend is accelerating.
In recent months, several global companies have started moving parts of their operations from Singapore to Malaysia. This shift is driven by the pursuit of lower costs, tax incentives, and access to broader markets.
The most visible examples of this change have come from the ready-to-wear and beverage sectors. In May, H&M announced it would relocate its Southeast Asia headquarters from Singapore to Kuala Lumpur, affecting 78 positions.
Heineken, in March, revealed that large-scale production for Asia Pacific Breweries Singapore would be shifted to regional facilities, particularly beer factories in Malaysia and Vietnam. The company emphasized that its presence in Singapore would not be completely phased out.
Why Are Companies Changing Direction?
Alwyn Lim, an associate professor of sociology at Singapore Management University, noted that these transitions have accelerated noticeably. According to Lim, there has been a visible increase in companies relocating operations to Malaysia since early 2026.
Lim explained that this trend has become more pronounced compared to 2025, due to simultaneous effects of policy signals and cost pressures. Companies are seeking significant cost advantages in rent, wages, and operating expenses.
He described the restructuring of production and supply chain networks as part of a broader global trend. The COVID-19 pandemic, along with recent trade and geopolitical tensions, has pushed firms to split operations to reduce costs, enhance security, and increase speed.
Layoffs and Production Shifts
Bread producer Gardenia announced on May 20 that it would move bakery production to Malaysia, resulting in 141 layoffs in Singapore. The company stated this move is part of efforts to improve operational efficiency and maintain competitiveness amid an increasingly challenging global environment.
Local beverage company Yeo’s also announced in March that it would lay off 25 employees in Singapore, citing plans to consolidate can production in Malaysia. The company affirmed that Singapore would remain its regional hub.
These moves indicate that companies are not abandoning Singapore entirely but are reorganizing regional roles. Corporate headquarters, innovation teams, and senior decision-making bodies often remain in Singapore, while more intensive production and scaling needs shift to Malaysia.
Singapore as Headquarters, Malaysia as Production Hub
David Blasco, country director of Randstad Singapore, said Singapore remains highly attractive for research and development, strategic decision-making, and top talent. In contrast, Malaysia offers lower overhead costs, attractive tax incentives, and extensive industrial space.
Linda Teo, country manager of ManpowerGroup Singapore, described this movement not as mass migration but as regional diversification. According to Teo, most companies do not choose between Singapore and Malaysia exclusively; instead, they use both markets complementarily within a unified model.
Both H&M and Heineken emphasized that Singapore continues to be important for them. H&M stated it will maintain its office and retail presence in the city-state, sustaining its long-term commitment.
Heineken explained that its role in Singapore will deepen in regional commercial operations, logistics, innovation, and AI-supported capabilities.
JS-SEZ Plan Could Accelerate the Process
The soon-to-be-launched Johor-Singapore Special Economic Zone (JS-SEZ) may influence how companies allocate resources between Singapore and Malaysia. The zone is expected to cover over 3,500 square kilometers and facilitate investment across 11 sectors, including business services, digital economy, and education.
Enterprise Singapore noted that as global trade, investment, and talent competition intensify, JS-SEZ represents a significant milestone in bilateral economic cooperation. The Malaysia Investment Development Authority announced incentives such as tax rates as low as 5% for eligible sectors starting January 2025.
Lim suggested that JS-SEZ could offer Singapore-based companies opportunities to share in Malaysia’s growth but might also accelerate some firms’ shift toward Malaysia’s much larger domestic market, leading to exits from Singapore.
The key question Lim highlighted is whether companies will relocate entirely or establish a dual model where senior functions remain in Singapore while production and more basic operations move to Malaysia. Recent moves indicate this dual model is becoming increasingly common.
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